The Philippines is moving towards a significant policy shift as the government has decided to end all operations of the Philippines Offshore Gaming Operators (POGOs) by the end of 2024. This decision, confirmed by the Philippine Amusement and Gaming Corporation (PAGCOR), will impact both foreign and local employees working under POGO licenses, including those hired under Offshore Gaming Employment Licenses issued to workers of Internet Gaming Licensees (IGLs).
Background and Decision Details
The decision to cease all POGO operations by December 31, 2024, aligns with the nationwide ban announced by the Philippines’ President during his State of the Nation Address (SONA). The directive to shut down POGOs and rebrand them as IGLs is part of a broader strategy to curb illegal online gambling activities and improve public order and safety.
Under the new policy, all work permits for POGO employees, both local and foreign, will expire at the end of 2024. This change marks a departure from the previous system, where licenses for POGOs and their employees had a three-year validity period. PAGCOR’s Chief Executive Officer, Alejandro Tengco, has been instrumental in implementing this directive, despite expressing concerns over the potential economic and employment fallout.
Economic Impact: A PHP 23 Billion Revenue Loss
PAGCOR’s CEO Alejandro Tengco has voiced concerns about the substantial economic repercussions of this policy change. The ban is projected to result in a PHP 23 billion (approximately USD 0.41 billion) revenue loss for PAGCOR. The offshore gaming industry has been a significant source of income for the Philippine government, contributing billions of pesos annually. The cessation of POGO operations will not only reduce government revenue but also impact various sectors associated with the gaming industry, including real estate, hospitality, and service sectors.
Additionally, Tengco highlighted the potential loss of around 40,000 local jobs, which further underscores the far-reaching implications of this decision. The gaming industry has provided employment opportunities to a vast number of Filipinos, many of whom may find it challenging to secure alternative employment in the short term.
Impact on Employment: A Closer Look at Job Losses
The job losses resulting from the POGO ban are not limited to direct employees of gaming operators. They extend to a broader network of businesses that have thrived on the industry’s presence in the Philippines. From real estate developers who lease office spaces and residential properties to POGO companies and their employees, to small businesses such as restaurants and retail shops catering to POGO workers, the ripple effects are likely to be substantial.
The loss of 40,000 jobs is a significant blow to the local economy, particularly in regions heavily reliant on the gaming industry. For many workers, POGO employment has offered better wages and more stable employment compared to other sectors. With the impending ban, these workers face an uncertain future, with few industries able to absorb such a large workforce swiftly.
Foreign Workers: A Mass Exodus
The announcement of the POGO ban on July 22, 2024, set off a chain of events that significantly affected foreign workers in the Philippines. These workers, who are predominantly from China, were given 60 days from July 26, 2024, to leave the country. Failure to comply with this directive would result in penalties, including fines and possible detention.
The government’s strict stance on foreign workers reflects its commitment to enforcing the POGO ban and addressing the issues associated with illegal online gambling. Local authorities have urged the public to report illegal POGO workers, leading to a swift deportation of those caught without valid documentation.
The mass departure of foreign workers will likely have immediate social and economic effects. Areas with a high concentration of POGO employees are expected to experience a sudden drop in demand for housing, transportation, and various services. This shift could lead to an oversupply in the real estate market, particularly in metropolitan areas such as Metro Manila, where many POGO operations are based.
Appeals from PAGCOR: Seeking Exceptions for Outsourcing Companies
Despite the sweeping nature of the POGO ban, PAGCOR has appealed for certain exceptions. Specifically, Tengco has requested that outsourcing companies serving U.S. and U.K. operations be spared from the ban. These companies, which provide customer support and technical services to international gaming operators, are not involved in illegal gambling activities within the Philippines.
The distinction between local POGO operations and international outsourcing services is significant. While POGOs have been linked to various illegal activities and social issues, outsourcing companies play a crucial role in the global gaming industry’s ecosystem. Allowing these companies to continue their operations could mitigate some of the negative economic impacts of the POGO ban.
Government’s Stance: A Firm Crackdown on Illegal Gambling
The decision to ban POGOs reflects the Philippine government’s strong stance against illegal gambling. In recent years, POGOs have been associated with numerous controversies, including allegations of tax evasion, money laundering, and links to organized crime. The government’s crackdown aims to restore public order and address these concerns, even if it comes at the cost of significant economic loss and job displacement.
Moreover, the ban is seen as part of a broader effort to improve the country’s image as a safe and law-abiding nation. By eliminating illegal gambling operations, the government hopes to attract more legitimate foreign investments and promote sustainable economic growth.
The end of POGO operations in the Philippines marks a turning point for the country’s gaming industry and its broader economy. The decision, driven by concerns over illegal activities and the need for better regulation, will have far-reaching consequences, including a substantial loss of government revenue and local jobs. For foreign workers, the directive to leave the country signals the end of a significant chapter in the Philippines’ labor market.
As the nation moves towards a post-POGO era, the government will need to navigate the challenges of economic adjustment and workforce reallocation. Balancing the need for law enforcement with economic stability will be key to ensuring a smooth transition and minimizing the impact on affected communities. The coming months will be crucial in determining how the Philippines adapts to these changes and what the future holds for its gaming industry and broader economy.